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How Fast do Personal Computers Depreciate? Concepts and New Estimates

In: Tax Policy and the Economy, Volume 18

  • Mark E. Doms
  • Wendy F. Dunn
  • Stephen D. Oliner
  • Daniel E. Sichel

This paper examines the prices for communications equipment, an important component of information technology. Unlike prices for computers which officially fall sharply every year, the official prices for communications equipment have barely budged over the past decade. This paper combines earlier work on prices for several segments of communications equipment with new results for public exchanges, fiber optic equipment, and modems. The results suggest that prices for communications equipment fall much faster than official statistics would indicate, but not as fast as computers. The results presented in this paper, if incorporated into the NIPAs, would decrease MFP growth by about 0.1 percentage point per year and increase the contribution of capital deepening by a likewise amount. Also, GDP growth would be boosted marginally."

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This chapter was published in:
  • James Poterba, 2004. "Tax Policy and the Economy, Volume 18," NBER Books, National Bureau of Economic Research, Inc, number pote04-1, December.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10869.
    Handle: RePEc:nbr:nberch:10869
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    1. Alan J. Auerbach, 1980. "Tax Neutrality and the Social Discount Rate: A Suggested Framework," NBER Working Papers 0457, National Bureau of Economic Research, Inc.
    2. Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
    3. Ernst R. Berndt & Neal J. Rappaport, 2001. "Price and Quality of Desktop and Mobile Personal Computers: A Quarter-Century Historical Overview," American Economic Review, American Economic Association, vol. 91(2), pages 268-273, May.
    4. Jane G. Gravelle, 1994. "The Economic Effects of Taxing Capital Income," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262071584, June.
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